{ "title": "Transcript of the April 2023 Western Hemisphere Department Press Briefing", "publication": "IMF News, April 13, 2023", "sourceUrl": "https://www.imf.org/en/news/articles/2023/04/14/tr41423-april-2023-whd-press-briefing", "canonical": "https://www.imf.org/en/news/articles/2023/04/14/tr41423-april-2023-whd-press-briefing", "overlayPath": "/en/news/articles/2023/04/14/tr41423-april-2023-whd-press-briefing/index.md", "summary": "Transcript of the April 2023 Western Hemisphere Department Press Briefing", "publishDate": "2023-04-13", "sections": [ { "heading": "Regional growth and resilience", "content": "- The Western Hemisphere \"has proven to be very resilient\" to multiple shocks and \"growth has repeatedly surprised on the upside.\"\n- Regional growth path:\n - Grew by 7 percent in 2021.\n - Grew by 4 percent in 2022.\n - Expected to decelerate to 1.6 percent in 2023, with most of the region expected to avoid a recession.\n- Drivers of the slowdown:\n - Main trading partners are slowing.\n - \"The favorable terms of trade that we saw in the aftermath of COVID\" have lessened somewhat.\n - Global financial conditions are \"less friendly than they were a year ago.\"" }, { "heading": "Inflation and monetary policy", "content": "- Inflation dynamics and distribution:\n - High inflation \"disproportionately hurts lower-income households\" and has been concentrated in large increases in food prices.\n - Headline inflation in the largest Latin America economies: peaked at around 10 percent in mid-2022; decelerated to around 7 percent in March.\n - Core inflation in these economies averaged 8.4 percent in February.\n - \"For most countries, inflation remains well above the Central Bank’s target range.\"\n- Central Bank response and outlook:\n - Central Banks responded \"quick and assertive[ly]\"—effective in anchoring medium-term inflation expectations.\n - Expectation that full impact of interest rate increases will be seen \"during the course of this year.\"\n - Central Banks \"will need to remain resolute\" until inflation is \"unambiguously heading down towards target.\"\n - Interest rates in the region will \"likely remain high for much of this year and, in some cases, even well into next year.\"" }, { "heading": "Fiscal policy stance and recommendations", "content": "- Current stance:\n - Fiscal policy in 2023 is expected to be \"broadly neutral in most countries\" despite low unemployment, constrained capacities, and unresolved wage and price pressures.\n- Recommended rebalancing:\n - Fiscal policy should play a bigger role via a \"more contractionary fiscal stance this year and next\" to:\n - Bring demand back into line with supply.\n - Lower public debt that increased abruptly due to the pandemic.\n - Allow interest rates to decline earlier and reduce potential financial stability risks emerging in advanced economies.\n- Design considerations:\n - Preserve key social programs and continue spending on housing, education, and public infrastructure.\n - Reduce inefficiencies in public spending (e.g., public procurement transparency and lower costs).\n - Redesign taxes to raise revenue and make tax systems more progressive; \"The wealthy and the more fortunate should pay more of their fair share.\"\n - Well-designed policies can \"restore macroeconomic stability, can tackle inflation, and can bring down debt in a socially equitable way.\"" }, { "heading": "Financial sector and external risks", "content": "- Banking stresses in advanced economies:\n - \"So far, we see these problems have had little impact on Latin America and the Caribbean.\"\n - Reasons: limited direct linkages to troubled institutions in the U.S. and Europe; payoff from past investments in supervision, regulation, and high banking standards in the region." }, { "heading": "Country-specific engagements and observations (Q&A highlights)", "content": "- Ecuador:\n - Discussions with authorities on IMF financing are ongoing, but \"we haven’t actually received any request, formal request, from the government on financing.\"\n - On political uncertainty: uncertainty is empirically associated with lower consumption and investment; \"the sooner the uncertainties are resolved, the better.\"\n- Brazil:\n - IMF supportive of efforts to design a fiscal framework; impressed with proposed medium-term primary balance improvement.\n - Article IV Consultation in Brazil scheduled \"next month\" for more detailed discussion.\n- Argentina:\n - IMF completed a review in March and disbursed; drought has made the situation more difficult.\n - IMF will engage with authorities for next review and to help recalibrate policies; specifics are premature.\n- Honduras:\n - Longstanding IMF engagement with capacity development support; continuing discussions on balancing protection of the vulnerable with stronger public finances.\n - Program discussions ongoing; no new developments announced.\n- Panama:\n - Rapid recovery post-pandemic; reached pre-pandemic GDP levels though some sectors lag in employment.\n - Expected to be among the fastest growing economies in the region in 2023.\n - Structural shift from investment-driven growth (canal, mining, public infrastructure) toward services: logistics, finance, legal services, and trade-related services.\n- Suriname:\n - Program in place but reviews stalled around mid-2022 due to personnel changes and policy issues.\n - Authorities reached agreement with Paris Club creditors and are close with India; progress on restructuring Chinese official debt would help the program.\n- Chile:\n - Only country in the region projected to contract in 2023: contracting 1 percent.\n - Context: Chile grew 14 percent over the last two years and remains well above pre-pandemic trend output.\n - IMF considers Chile to have strong fiscal and monetary institutions; IMF \"do[es] think a tax reform is needed\" and encourages dialogue with Congress to reach consensus.\n- El Salvador:\n - IMF engaging with authorities; Article IV discussions recently finished. No formal program request received; preliminary discussions on a possible program are ongoing.\n- Caribbean tourism-dependent economies and Citizenship by Investment (CBI) programs:\n - CBI programs have been \"a very important feature of the region\" and generated important revenues.\n - IMF advice on CBI revenue management:\n - Revenue is very volatile; recommended saving CBI revenue and spending from the income stream rather than lumpy, stop-go spending.\n - Maintain and improve the integrity of CBI schemes; ECCU moving to improve integrity in conjunction with larger economies.\n - Tourism outlook:\n - U.S. economy expected to slow but still grow; shift from goods to services consumption benefits tourism-dependent Caribbean economies.\n - IMF baseline does not assume U.S. recession, but counsels contingency planning for potential U.S. slowdown or higher U.S. interest rates." }, { "heading": "Cross-cutting policy messages", "content": "- Macroeconomic policy coordination:\n - With most economies operating at or above potential, macro policies should aim to realign demand with potential output to ease price pressures.\n - Monetary tightening has done much of the heavy lifting; fiscal adjustment can complement monetary policy to accelerate disinflation and debt consolidation.\n- Governance and reform priorities:\n - Improve public spending efficiency and procurement transparency.\n - Undertake progressive tax reforms to raise revenue and strengthen public finance credibility.\n - Strengthen financial sector supervision to insulate the region from external banking stresses.\n\nSource: IMF Communications Department, April 13, 2023.\n\n---\n\n\n References\n\n- Argentina and the IMF\n- Brazil and the IMF\n- Chile and the IMF\n- Ecuador and the IMF\n- El Salvador and the IMF\n- Honduras and the IMF\n- Panama and the IMF\n- Suriname and the IMF\n- Transcripts\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/04/14/tr41423-april-2023-whd-press-briefing" } ], "bullets": [ "[Markdown version](/en/news/articles/2023/04/14/tr41423-april-2023-whd-press-briefing/index.md)", "[Structured JSON version](/en/news/articles/2023/04/14/tr41423-april-2023-whd-press-briefing/index.json)", "[Bundle manifest](/en/news/articles/2023/04/14/tr41423-april-2023-whd-press-briefing/bundle-manifest.json)", "Published: April 13, 2023", "The Western Hemisphere \"has proven to be very resilient\" to multiple shocks and \"growth has repeatedly surprised on the upside.\"", "Regional growth path:", "Drivers of the slowdown:", "Inflation dynamics and distribution:", "Central Bank response and outlook:", "Current stance:", "Recommended rebalancing:", "Design considerations:", "Banking stresses in advanced economies:", "Ecuador:", "Brazil:", "Argentina:", "Honduras:", "Panama:", "Suriname:", "Chile:", "El Salvador:", "Caribbean tourism-dependent economies and Citizenship by Investment (CBI) programs:", "Macroeconomic policy coordination:", "Governance and reform priorities:", "[Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm)", "[Brazil and the IMF](http://www.imf.org/external/country/BRA/index.htm)", "[Chile and the IMF](http://www.imf.org/external/country/CHL/index.htm)", "[Ecuador and the IMF](http://www.imf.org/external/country/ECU/index.htm)", "[El Salvador and the IMF](http://www.imf.org/external/country/SLV/index.htm)", "[Honduras and the IMF](http://www.imf.org/external/country/HND/index.htm)", "[Panama and the IMF](http://www.imf.org/external/country/PAN/index.htm)", "[Suriname and the IMF](http://www.imf.org/external/country/SUR/index.htm)", "[Transcripts](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2023/04/14/tr41423-april-2023-whd-press-briefing/index.md", "json": "/en/news/articles/2023/04/14/tr41423-april-2023-whd-press-briefing/index.json", "bundleManifest": "/en/news/articles/2023/04/14/tr41423-april-2023-whd-press-briefing/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T02:00:00.714Z" }